EP Energy Wins Fight With Landowners Over Oil Production Pause

Appeals court rules company's 40-day voluntary pause didn't terminate mineral leases

Mar. 10, 2026 at 10:23pm

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EP Energy E&P Co. won a legal battle with landowners over a 40-day voluntary pause in oil production in South Texas following the start of the Covid-19 pandemic. An appeals court ruled that the pause did not automatically terminate the company's mineral leases, as the leases allowed EP Energy to restore production or restart drilling within a 120-day window, which the company did in time to keep its leases.

Why it matters

This ruling is a victory for the reorganized EP Energy, now owned by Verdun Oil Company LLC, as it allows the company to maintain its mineral leases and continue oil production in the region despite the temporary pandemic-related pause.

The details

The three-judge panel of the US Court of Appeals for the Fifth Circuit affirmed lower court rulings that sided with EP Energy. The company's mineral leases gave it the ability to either restore production or restart drilling within a 120-day window, which EP Energy did in order to keep its leases.

  • EP Energy enacted a 40-day voluntary pause on oil production in South Texas at the start of the Covid-19 pandemic.
  • EP Energy restored production or restarted drilling within the 120-day window allowed by its mineral leases.

The players

EP Energy E&P Co.

A Houston-based oil and gas company that enacted a 40-day voluntary pause on oil production in South Texas at the start of the Covid-19 pandemic.

Verdun Oil Company LLC

The company that now owns the reorganized EP Energy.

US Court of Appeals for the Fifth Circuit

The appeals court that ruled in favor of EP Energy, affirming lower court decisions.

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The takeaway

This case highlights the importance of mineral lease terms that provide companies with flexibility to temporarily pause production during unforeseen events like the Covid-19 pandemic, without risking the termination of their leases.